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Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

ARTICLE 5

Permanent Establishment

(1) For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

(2) The term "permanent establishment" includes in particular:

  • (a) a place of management;
  • (b) a branch;
  • (c) an office;
  • (d) a factory;
  • (e) a workshop;
  • (f) a sales office;
  • (g) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;
  • (h) a construction or assembly site with duration of three or more months;
  • (i) a fixed place of business used for the purposes of storage, display or delivery of goods or merchandise belonging to the enterprise; and
  • (j) a goods depot, belonging to the enterprise, maintained for the purpose of storage, display or delivery of goods.

(3) The term "permanent establishment" shall be deemed not to include:

  • (a) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
  • (b) the maintenance of a fixed place of business solely for the purpose of purchasing merchandise, for collecting or furnishing information relating to scientific research or for carrying on substantially similar activities of a preparatory nature, for the enterprise;
  • (c) the use of a fixed place of business solely for the purpose of advertising.

(4) Where a person-other than an agent of independent status to whom paragraph (6) applies-acts on behalf of an enterprise, and has, and habitually exercises, in a Contracting State, the authority to conclude contracts on behalf of the enterprise, then that enterprise shall be deemed to have a permanent establishment in that Contracting State. Similarly, where an agent habitually maintains in a Contracting State a stock of goods or merchandise belonging to the enterprise, through which orders received on behalf of the enterprise are executed, then such agent shall be deemed to be vested with the authority to execute orders on behalf of the enterprise in that Contracting State.

(5) An insurance enterprise of a Contracting State shall be deemed to have a permanent establishment in the other Contracting State, if it collects premiums or insures risks in that other Contracting State through a person other than an agent of independent status to whom the provisions of paragraph (6) of this Article apply.

(6) An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, a general commission agent or any other agent of independent status, provided that such persons act in the ordinary course of their business. However, if the enterprise has a stock of merchandise in consignment, from which sales or delivery are carried out, then such stock shall be the attributed to the existence of a permanent establishment of the enterprise.

(7) The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself be sufficient to constitute either company a permanent establishment of the other.